Want to Start Selling on Amazon? Learn How Much It Costs And What You Need To Get Started
If you’re looking to take your business to the next level, Amazon is the place to do it. With over 300 million active customers, Amazon is the world’s largest e-commerce platform and offers sellers some of the best opportunities in online retail.
But before you start selling on Amazon, it’s important to know a few things. What does it cost to become an Amazon seller? What do you need to know before you start? In this post, we’ll cover all the details about selling on Amazon, so you can make an informed decision about whether it’s the right choice for you. We’ll discuss the different fees, selling plans, and what you need to do to get started. Let’s dive in!
If you are ready to take your business to the next level and start selling on Amazon, you will need to understand the costs and requirements associated with setting up an Amazon seller account. This blog post will provide an overview of what is required, what it costs, and the potential risks and rewards of selling on Amazon.
What Does It Cost To Start Selling On Amazon?
Monthly Subscription Fees
When registering for an Amazon seller account, there are several fees you might run into. First, there’s a monthly subscription fee. Amazon currently offers two selling plans: Professional and Individual. The Professional plan costs $39.99 per month and includes all the features and resources you need to scale your business. These include permission to sell in multiple categories, the ability to attract shoppers with on-site advertising, and access to a variety of feeds, spreadsheets, and reports to track your business’s progress. The Individual plan has no monthly fee and instead only charges $0.99 per sale. However, this plan does not contain any of these useful seller features.
In addition to the monthly fees, Amazon charges referral fees on all products sold. These fees vary depending on the category of the item you’re selling. On the higher end, Amazon device accessories have a 45% referral fee, while video game consoles only have an 8% referral fee. The average referral fee is around 15%. Most categories also have referral fee minimums of $0.30, meaning this is the minimum you will pay in referral fees per sale.
Finally, FBA (Fulfillment By Amazon) fees must also be paid. This cost covers packing your orders, shipping and handling, customer service, and product returns. These fees will fluctuate depending on your product’s weights and dimensions. On the lower end, FBA fees could be around $4, while very large, heavy items can incur fees up to $160.
What Are The Requirements For Selling On Amazon?
When selling products on Amazon, there are certain documents you need to be accepted as a seller. Knowing the requirements and documentation needed to register is an important part of the process. Before jumping in, let’s review the eligibility types of documentation you’ll need.
Documentation Needed for Setup
There are several documents that you’ll need to provide in order to complete the setup of your Seller account. These include tax documents, identity verification documents, and business information documents.
Tax Documents: If you plan to sell your own product, you’ll need to provide documents that verify your organization’s Tax Identification Number (TIN). These may include a copy of your resale certificate, sales tax exemption certificate, or other documents issued by the tax authority in your country or region of residence.
Identity Verification: You will also need to provide government-issued identity verification documents such as a passport or driver’s license for yourself and any other authorized users of the account.
Business Information: In addition to these documents, Amazon will require information about your business such as your business name and website address, contact information, and a brief description of the products you plan to sell.
Documentation Needed for Activation
Once all the required Setup Documentation is submitted, your Amazon Seller account will be ready for activation which requires additional document submission. You’ll need to provide the following:
Tax Identification Number: You’ll have to provide Amazon with a Tax Identification Number (TIN), which may be either a Social Security number (for individuals) or an Employer Identification Number (for businesses). This will be used for reporting purposes by Amazon and must match what is provided on any tax forms already submitted by you or your company.
Bank Account Details: Amazon will also require bank account details so they can deposit any money earned from sales into this account when requested by you. This bank account must belong either to you or your company and should not be co-owned with another person unless stated otherwise in their Terms & Conditions Agreement.
Payment Method: Finally, you’ll need to select a payment method for accepting payments when customers purchase items from your store on Amazon’s Marketplace platform. This payment method could be PayPal, direct deposit into your bank account, or credit card depending on what works best for you or your company’s needs.
Is Selling On Amazon The Right Choice For You?
Selling on Amazon offers many benefits to sellers. One of the main advantages is access to millions of customers across the globe. This global exposure could result in increased sales and profits. Additionally, it’s relatively affordable to start selling on Amazon compared to other platforms. Amazon also makes selling your products easier and less time-consuming as they’ll handle all the shipping and customer service for you.
Although selling on Amazon has many advantages, there are some potential risks associated with it as well. The primary risk is marketplace competition. As more people become sellers on the platform, there’s a higher likelihood of someone else selling the same item as you, which makes it difficult to remain competitive in terms of pricing and exposure. Additionally, there’s a chance your reputation could be damaged if customers leave negative reviews.
With all this information in mind, it is important to research thoroughly before starting your journey into selling on Amazon and create a comprehensive strategy in order to ensure success in the long run and mitigate any potential risks associated with selling on this platform.